TSIF's Play of the Day -- ORS
It still amazes me that speculators...errr..I mean investors....would continue "falling" for these. This one just about pegs the Foolish meter.
Orsus Xelent Technologies, Inc., together with its subsidiaries, engages in the design, manufacture, and distribution of cellular phones for retail and wholesale distribution in the People's Republic of China. This is not a hard business to understand and unlike many of TSIF's Play of the Day, this is not a reverse merger OB equity nor is it a biopharm with data pending.
Orsus Xelent's share price on April 27th was $0.70 and that was generous. $2 On June 8th appeared to be a possible misunderstanding of the earnings report.
Over $7 on June 14th; $3 on June 17th; $5.85 today.
The GeoTeam on Seeking Alpha seems to try to explain the initial share price movement up to $2.
A reported EPS of $12.83 per share was the result of a one time writeoff, or a non-cash gain. The real EPS was a loss.
IN actuality the company continues to warn that they need a merger or capital raise to continue. Orsus has also gotten a letter from the NASDAQ that they face delisting as they have less than $2 Million in Stockholder Equity. The article also cites difficulty even finding Orsus headquarters.
The company agreed that their website was incorrect.
The website of Beijing-based Orsus-Xelent (ORS.A) listed phone numbers that were disconnected and addresses that belonged to other businesses, including Orsus's former investor relations firm in New York
The really funny part..(you gotta find some humor somewhere).....the CFO....yes CHIEF Financial Officer commented on the incorrect addresses....
"Commenting on the inaccuracies of the website, Hua said he didn't know too many details about the company because he hadn't been there that long -- in his current position for a little more than a year."
Digging into the 23 May, 10-Q....we find the company started as "State of Delaware in May 2004 under the name "Universal Flirts Corp"...... No explaination of what a FLIRT is/was, but apparently it wasn't a successful business.
On April 19, 2005, the Company, formerly known as Universal Flirts Corp., changed its list name to Orsus Xelent Technologies, Inc.
One key to the current volitility is the 12:1 Reverse stock split Orsus did. This left the equity with a scant 2 Million shares with only 2% held by insiders and none by institutions. Since June 7th, every share has traded hands the equivalent of 12 TIMES!!!!
Orsus has essentially one customer, had only $6,000 in selling expenses and $24,000 in general expenses, but $120,000 in interest expenses. They are in default on their loan. Over $94 Million in receivables, of which $38 Million was determined to be BAD.
"The Company did not pay salaries and welfare to employees in the first quarter of 2011 due to a difficulty in cash flow."
WOULD you pay $7 per share for this??? How about $5?? Do I hear $2??? How about $0.02..... NOT ME!
Any purchase of a share of Orsus is not even speculating..... it's just plain FLIRTing with stupidity! (NO insult intended if you own or temporarily touched one of those 2 Million shares this past week).